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Neon to take mainframe complaints to Europe

More legal headaches for IBM

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It looks like some more lawyers are going to make some more money off IBM's mainframe business.

Neon Enterprise Software, the company that created the zPrime tool for shifting mainframe workloads to lower-cost zIIP and zAAP specialty engines on IBM's System z servers, announced today that it intends to file a compliant with the European Commission "aimed at IBM’s on-going anticompetitive and abusive conduct".

The company did not elaborate on what it planned to say in its suit, and the company's lawyer, Michael Reynolds of Allen & Overy LLP, was traveling in Spain and unavailable as El Reg went to press. But it seems likely that the suit that Neon will file a complaint that will look very much like the one it filed last December in the U.S. District Court for the Western District of Texas, which is located in Austin.

In that suit, Neon alleges that IBM tried to scare off mainframe customers contemplating using the zPrime tool in violation of the Lanham Act and also unfair competition laws in California, where both companies do business. Neon's US lawsuit suggests potential customers were dissuaded from buying the product when "IBM elected to interfere through the use of specific and unlawful disparagement of zPrime and threats of retaliation and baseless litigation," which Neon's lawyers say violate the Texas Deceptive Trade Practices Act and provisions of the act that created the Federal Trade Commission.

The suit also named financial services giant Wells Fargo and healthcare provider Highmark, were two prospective customers who "tested and loved zPrime" but at the time elected to not install the program because of IBM's actions.

Neon estimated at the time that among its prospective customers, hundreds of millions of dollars in lost mainframe hardware and software sales to IBM were at stake thanks to zPrime, representing tens of millions of dollars in damages through lost sales.

Back in November, Neon said more than 1,500 of the 6,000 to 7,000 estimated unique IBM mainframe shops in the world had contacted it about the zPrime products, with 200 giving it consideration and 50 testing it; at that time, 14 shops had it in production, but when the zPrime 2.1 update was announced last week, that number of zPrime production users had slipped to eight.

IBM countersued Neon in January in the Texas court after trying a more soft approach of warning mainframe shops a year ago in the wake of the initial zPrime rollout that that use of the tool could violate of their mainframe software licensing agreements - something that Neon has denied vehemently. IBM's suit basically says Neon is doing something akin to selling a program to help TV viewers hack free cable, and alleges further that Neon's business violates both federal and state law, that Neon has tortuously interfered with contracts between IBM and its customers, and that Neon has breached its own agreements with Big Blue.

The filing goes on to suggest that Neon has violated IBM's copyrights because the use of zPrime makes unauthorized copies of IBM's mainframe systems software, and that zPrime violates the Digital Millennium Copyright Act in that it allows companies to gain access to components in mainframes they had not paid for.

T3 Technologies, a former clone mainframe distributor, and TurboHercules, which has created a commercial variant of the open source Hercules mainframe hardware emulator, have also filed complaints against IBM in the European courts. ®

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